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An ethanol-blended gasoline plant operated by Petroleum Mechanical Executing and Assembly Joint Stock Company in the northern province of Phu Tho. File photo

Investigators from the Ministry of Public Security proposed charges against 16 executives and employees at a subsidiary of the state-owned PetroVietnam on Monday for allegedly embezzling over VND85 billion (US$3.97 million).

The alleged mastermind of the scheme, Trinh Van Thao, fled to the US before the investigation began. Police have issued an international warrant for the arrest of the former general director of Petroleum Mechanical Executing and Assembly Joint Stock Company (PVC-ME).

In a proposal submitted to the Supreme People’s Procuracy, investigators said that between November 2009 and September 2012, Thao instructed his alleged co-conspirators to pocket over VND47 billion ($2.19 million) from the company budget.

Thao allegedly established a secret slush fund in which to deposit the payments in exchange for a cut.

The money was withdrawn as advanced payment for company projects and signed for by 20 employees who never received the money.

Investigators said the suspects also funneled over VND38 billion ($1.77 million) in customer and partner payments into Thao's slush fund.

Their actions caused VND51.7 billion ($2.42 million) in losses for PVC-ME, its partners, and the government.

The investigators asked that two of the suspects, chairman Vu Duy Thanh and vice director Tran Xuan Tinh, be charged with “criminal negligence” for failing to detect the fraud and lending their signatures to several fraudulent payment slips worth tens of billions of dong.